Iraqis angry over alleged religious insults have beat up a Briton working at an energy company in the country's south and spurred another firm to suspend operations, officials say.

Prime Minister Nuri al-Maliki on Tuesday waded into the disputes, which involved American oilfield services companies Schlumberger and Baker Hughes, calling for the deportation of one of the expats involved.

Iraqi officials said a British employee of security firm G4S working at a Schlumberger camp near the giant Rumaila oilfield had on Monday tried to remove flags and pamphlets commemorating Imam Hussein (PBUH), the grandson of Prophet Mohammad (PBUH), just days before annual Ashura rituals marking his martyrdom.

"A British employee took down a flag for Imam Hussein and a picture of Imam Ali (PBUH) from the cars of the security company, and tore them down with a knife," said Ali Shaddad, a member of the provincial council of Basra, which is predominantly Shia Muslim, AFP reported.

Rumaila, located in south Iraq, is the country's biggest oilfield, where Britain's BP and China's CNPC have been working with oilfield services companies to ramp up output.

"This provoked a group of workers, and they went and hit him repeatedly," said Shaddad.

He said the man was transferred to a hospital in Basra and had yet to be discharged. The provincial councilor added that there were demands for Schlumberger's offices in Basra to be closed and its foreign staff deported.

Maliki himself issued a statement calling for the expat to be deported, while also urging local residents to exercise restraint.

The British embassy in Baghdad said only that it was "aware of a consular issue, and we are following up."

The incident follows a similar one days earlier in which an Egyptian employee of Baker Hughes, another American oil services firm, also tried to remove flags commemorating Imam Hussein and Imam Ali from vehicles he was to use.

It sparked protests which spurred the authorities to arrest the Egyptian, Shaddad said, on charges of insults against religion. The case is ongoing.

Baker Hughes, which said in a statement that no injuries were suffered and its facility was secured, suspended its Iraq operations in the aftermath of the incident and declared a force majeure to its clients because of a "significant disruption of business".

"While we investigate this incident, and until the work environment has stabilized, we are halting activities in Iraq," Baker Hughes chief executive Martin Craighead said in a statement.

"We hope to resolve this issue in a timely manner, and resume operations in support of our customers and the country of Iraq, as soon as it is safe to do so."

The two incidents come amid commemorations marking the martyrdom of Imam Hussein in 680 AD at the hands of the armies of the caliph Yazid, which has over time come to mark the symbolic split between Islam's Sunni and Shia sects.

To commemorate the occasion, millions of Shias converge on the Iraqi city of Karbala, which houses a shrine to Imam Hussein.

Several major international energy firms operate in south Iraq, which is rich in oil reserves, but take security precautions in the form of fortified camps and secured convoys due to the high level of violence in the country.

In a sign of the importance attached to Iraq, however, outgoing Shell chief executive Peter Voser met with Maliki on Tuesday on a visit to Baghdad.